Odey International Fund monthly report for the month ended July 31, 2015.
Performance Overview
- In July-15 the Fund returned +1.3% against the MSCI World Index Daily TR Net Local return of +2.5%.
- Positive performance came from our holdings in sectors including Information Technology (+1.0%), Materials (+1.0%) and Financials (+0.7%). Our holdings in the Consumer Discretionary (-2.6%) sector disappointed.
- Individual best performers this month were Sky (+0.9%) and Anglo American (+0.5%); the worst were Sands China (-1.1%) and Swatch Group (-0.8%).
Odey International Fund – Manager’s commentary
Does Corbyn’s success in the Labor Party leadership contest show that everyone is retreating back into their essential beliefs, irrespective of how realistic they are. Dreaming about home?
Meanwhile China’s economy continues to slow down whilst monetary policy tightens. When does it go into recession? Easier to predict than when does it join the IMF?
Nothing very wrong with the developed world, although Greece is not solved. However global prices are too high and activity a little too weak. Low interest rates give central banks no fire power in the event of a slowdown.
Will a recession in the developing world lead to a recession in the developed world? With markets waiting for the US to raise interest rates, this question is not being asked.
Maybe the odds are still right to be optimistic about the world economy, but some of the reasons for being so – weak commodity prices giving consumers fire power – don’t seem to be working this time.
From where I look, China seems to be sacrificing any growth it might get out of its misshapen economy by holding onto the currency peg with the US dollar. The day that China understands that it must devalue, is the day that deflation really breaks out across the world. It doesn’t feel that good even now.
Clowns to the left of me,
Jokers to the right, here I am,
Stuck in the middle with you.
